C.E.O.s Ponder a New Game, With Trump’s Rules

"If you were to look at our game board of all the possible outcomes of the election, this one wasn't even on the sheet."

That was how Mark T. Bertolini, chief executive of the large health insurer Aetna, described the election of Donald J. Trump as the next president. He was speaking with me last Thursday on stage at The New York Times's annual conference, DealBook: Playing for the Long Term.

"We started with a fresh piece of paper yesterday. We had no idea how to approach it," Mr. Bertolini said.

Business executives across the nation and the world have been whipping out fresh pieces of paper to map how Mr. Trump's election and Republican control of the White House, Senate and House — which may make Washington's notorious gridlock a memory — will reshape economic policy.

The stock market has jumped, taking many prognosticators by surprise, in anticipation of the seismic changes Mr. Trump has promised: a repeal or refashioning of the Affordable Care Act, a dismantling of the Dodd-Frank regulations for Wall Street, a substantial haircut for corporate and personal income tax rates, and a major infrastructure spending program, among other things.

While the new conventional wisdom may be that the nation is about to see comprehensive change, the truth is that it is likely to be more incremental than across the board.

Take, for instance, the Dodd-Frank Wall Street Reform and Consumer Protection Act. While you would think much of the finance industry would salivate at the chance to rid itself of the law, its view is more nuanced. Most companies have made large investments and changes in their business practices to comply with the law. So it's hard to see how even the law's die-hard opponents in the industry would press for the full repeal that Mr. Trump said he would pursue.

"I wouldn't want regulation to be repealed in toto," he added. "If you want to be good for bankers, you have to have policies that would be good for economic growth."

More likely than a repeal, Mr. Trump's administration will try to eliminate the components he has criticized most. A Trump administration could try to weaken the Consumer Financial Protection Bureau, the watchdog agency created by Dodd-Frank, which Republicans loathe, for example.

"The C.F.P.B. probably won't be eliminated," Ian Katz, a research analyst at Capital Alpha Partners in Washington, wrote in a note to clients. "It would be horrible politics and optics to get rid of an agency that was established to protect the little guy."

Mr. Katz predicted that the Trump administration would be able to push through a switch that critics of the agency have long lobbied for: a shift in control of the consumer bureau from a single director to a bipartisan commission.

Mr. Trump might also focus on changing a rule for small banks that grow to more than $10 billion in assets. Currently, such growth catapults a bank into a new regulatory category, one that comes with much stricter scrutiny and more elaborate reporting requirements. This rule has been criticized by the banking industry as an impediment to growth and competition.

As for the return of Glass-Steagall — something Mr. Trump has talked about — don't bet on it. "The Republican Party's call for a return to a division of commercial and investment banking shouldn't be taken seriously," Mr. Katz wrote. "That was part of a campaign document. Big banks are useful as a populist scapegoat, and Trump may continue to use them in that way. But neither he or his top aides are interested in Glass-Steagall 2.0."

Piecemeal change may also be true of Mr. Trump's pledge to undo Obamacare, which was one of his bedrock campaign promises.

Mr. Bertolini of Aetna predicted: "There will be a repeal first, and I think the repeal will be at a minimum in name."

It's nearly impossible for the law to be replaced with the flip of a switch. "Because what's going to happen in the next year?" he said. "We have people signed up; we have to honor that through 2017. We'll have to work quickly to have something for 2018."

Mr. Bertolini said that whatever replacement plan might materialize, the government was not going to just stop insuring the 20 million or so people who are covered under the Affordable Care Act. "You can't put them out on the street without insurance," he said. His expectation is that Medicare Advantage will be expanded.

The backpedaling on the "repeal" pledge has already begun: Mr. Trump has said in the past several days that he intends to make sure that health insurers will not be able to turn away people with pre-existing conditions, and that people under the age of 26 will still be able to have coverage under their parents' plans.

David A. Grogan | CNBC

Lloyd Blankfein, Chairman and CEO of Goldman Sachs.

About the latter provision, Mr. Trump said he would "very much try and keep that." In an interview with Lesley Stahl of "60 Minutes" that aired Sunday night, the president-elect said that the measure "adds cost, but it's very much something we're going to try and keep."

Of course, the biggest question is how Mr. Trump is going to create a new manufacturing class in America. He has suggested that he is going to renegotiate trade agreements, increase tariffs on goods and deport illegal immigrants — both for security reasons, he contends, and because they take jobs from Americans. How those ambitions ultimately play out is anyone's guess.

One issue that Mr. Trump has seemingly avoided is that of how new technologies are steadily taking American jobs.

"The jobs that are routine are going to be replaced by technology," Eric Schmidt, the chairman of Alphabet, the parent company of Google, said at the conference.

"Manufacturing jobs are infinitely safer today because robots do the dangerous work," he said. "We take that for granted."

Despite all of the hand-wringing among C.E.O.s surprised about the outcome of the election, there was a sense of optimism — or at least a sense of hope — that pervaded their words.

"We all know a lot about Trump the campaigner — now we have to find out about the Trump who needs to get things done," Mr. Blankfein said.

"He will start to think not about getting elected but about what his legacy is going to be," he continued. "I assume you go into that office and you think about your place in history and things change."

Mr. Blankfein added, "I'm going to see how it goes before I become mournful."